Prime Minister Ivo Sanader laid the foundation stone on January 30 for a factory which will enable TZV Gredelj to switch rolling stock production from central Zagreb to a modern plant in the Croatian capital's suburbs.

The company currently operates from two sites in Zagreb. Rolling stock and trams are produced at Trnje, close to the city centre, while the locomotive activities have been based at Vukomerec on the edge of the city since 1967. Running two sites increased the cost and complexity of production, and in recent years Zagreb city council has wanted to develop the potentially valuable central site for other uses.

The sale of the Trnje site to the council in July 2006 provided TZV Gredelj with most of the €90m which is now being invested in a major upgrade and expansion of the Vukomerec plant, where all operations will be concentrated to allow Trnje to be vacated at the end of 2009.l